Mumbai: After trying to stop the historic devaluation of the rupee against the US dollar by selling a huge amount of dollars in two days, the Reserve Bank of India (RBI) now now suddenly convertible rates to increase liquidity in the banking system. It has been decided to add Rs 50,000 crore. This will be the largest liquidity-growing operation performed by RBI in a day in a year.
After massive intervention in the foreign exchange market in the last two days, RBI on Wednesday decided to add a record of Rs 2.5 lakh crore in a record banking system. RBI will add this liquidity to the variable rate through repo auctions, which is the greatest liquidity injection in a year.
On February 10, the liquidity deficit in India’s banking system increased four times in less than a week to about Rs 2 lakh crore. Traders said that the outbreak of taxes and the dollar sales by the central bank were the main reasons for this. The RBI sold $ 4 to 7 billion in the foreign exchange market on Monday to prevent the rupee from continuously weakening against the dollar.
The rupee again weakened today amid the Reserve Bank of India intervention and its decision to increase liquidity. The rupee fell seven paise to close at 86.89 against the dollar. At the same time, today the rupee also strengthened compared to the currencies of other countries. It increased by 54 paise to 89.12 against the euro and 78 paise against the British pound to 108.14.
